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Worcestershire County Council taps River and Mercantile for options strategy

Worcestershire County Council Pension Fund, Worcester, England, hired River and Mercantile Group to implement and manage an equity protection strategy, a spokeswoman said.

River and Mercantile will uses a "static options hedge solution," with a £1.2 billion ($1.7 billion) notional value, the spokeswoman at the £1.9 billion pension fund added. The plan's intention was to reduce the likelihood that further deficit contributions will be required at the 2019 valuation, she said.

The option was implemented in early March 2018 and will be in place until 2019.

"The majority of the improvement in the funds' assets since the 2016 valuation is attributable to the rally in equity markets over the period. The actuary strongly recommended that the fund consider using an equity protection strategy," the spokeswoman said.